A single justice of the Supreme Judicial Court (“SJC”), located in Boston, Massachusetts, has entered an order indefinitely suspending of an attorney after finding that he had misused client funds. In the matter of Michael J. Fenton, an attorney was hired as counsel for the executor of an estate, including as closing attorney for the sale of the decedent’s residence. After the sale closed, the attorney received the proceeds, which were to be distributed equally to the decedent’s three sons.
A single justice of the Supreme Judicial Court (“SJC”) of Massachusetts has entered a judgment suspending a Boston attorney, after finding that he had misappropriated client funds. In the matter of Thomas Eisenstadt, a lawyer received settlement payments on behalf of two clients in unrelated matters and kept the money for himself. He eventually paid the clients their shares, but as a result of his withholding fund, medical liens were not paid.
A single justice of the Supreme Judicial Court (“SJC”), has entered a judgment suspending a Boston attorney for a period of three months, after finding that he violated the Massachusetts Rules of Professional Conduct. In the matter of Bernard Kansky, a lawyer represented three of five siblings, who were all beneficiaries of their father’s estate. The father had a retirement account for postal workers, which was not an asset of the estate, but provided that each child was entitled to an equal share of the funds in the account.
The attorney’s clients claimed that the other two children owed money to the estate, which they would likely fail to re-pay if their shares of the retirement account were distributed directly to them. In an attempt to prevent this from occurring, the attorney sent two misleading letters to the Federal Retirement Thrift Investment Board (“FRTIB”), including attaching an altered copy of a temporary restraining order. Additionally, the attorney misled a Probate and Family Court when he failed to inform a judge that the co-administratrix of the estate had opposed an ex parte motion the attorney filed with the court.
The Massachusetts Court of Appeals, located in Boston, affirmed summary judgment in favor of an attorney in a legal malpractice case. In Scanlon v. Dukess, a real estate investor sold a property in Brockton, Massachusetts and sought to purchase a replacement property in order to defer capital gains tax on the sale, which is permitted by federal statute 26 U.S.C. § 1031 and is known as a ‘1031 exchange’.
Under that statute, the investor had to identify to the IRS possible replacements within 45 days of the sale of the Brockton property and then complete the purchase within 180 days. The investor listed three properties, but only one in Taunton, which was leased by a drugstore, qualified for a 1031 exchange.
After the 45 days had passed, the investor consulted his long time attorney about the purchase of the Taunton property. The attorney advised him that he would have to assume the existing lease, but failed to inform him that the lease did not contain a condemnation clause, which would prevent the drugstore from sharing in the proceeds of an eminent domain taking. The investor purchased the property on the final day of the 180 day period.
The Supreme Judicial Court (“SJC”) in Boston, Massachusetts has entered a judgment of disbarment of a Massachusetts attorney, who practiced law in Rhode Island without a license and misused client funds. In the matter of David R. Ardito, a lawyer had a longstanding friendship with a married couple from Rhode Island. In 2005, the wife sustained personal injuries in an auto accident and as the result of a slip and fall at a local store.
Both incidents occurred in Rhode Island, and although he was not licensed to practice law there, he offered to represent the wife, pro bono. In doing so, the attorney misrepresented his qualifications in violation of Mass. R. Prof. C. 1.16(a)(1). The wife agreed to hire the attorney, and he commenced separate actions against the other driver and the store which constituted the unauthorized practice of law contrary to Mass. R. Prof. C. 5.5(a). Two years later, he settled both cases without informing the couple. He received settlement checks and signed them on behalf of the couple without their authority, deposited the funds into his lawyers trust account, and never dispersed them to the couple.
Over the following years, the wife made repeated inquiries about the status of the cases. The lawyer falsely ensured her that the lawsuits were ongoing. Eventually, the woman became suspicious and filed a petition with the Board of Bar Overseers (“BBO”), who instituted disciplinary proceedings.
The Massachusetts Appeals Court, which is located in Boston, has affirmed the dismissal of a legal malpractice action and summary judgment of a related quantum meruit claim. A woman provided care to her stepfather during the last years of his life. She had hoped that she and her children would be named sole or principal beneficiaries of her stepfather’s estate. However, when he died she was not compensated for her services.
The woman then sued the attorney who served as administrator of the estate for legal malpractice alleging that he negligently failed to name her as primary beneficiary. She also sought payment from her stepfather’s estate for the value of her services. The attorney moved to dismiss both counts on the basis that the woman failed to state a claim upon which relief could be granted. The court allowed the attorney’s motion, but permitted the woman to amend her complaint to re-plead her quantum meruit count. She amended her complaint and the attorney successfully moved for summary judgment. The woman appealed from the summary judgment ruling only.
The appeals court found that, although she had included arguments in her appellate brief with respect to the dismissal of her malpractice count, she had waived her appellate rights for failing to include these issues in her notice of appeal. Nevertheless, the court held that the dismissal was proper because she could not prove that an attorney-client relationship existed between her and the attorney.
The appeals court also affirmed the summary judgment for the attorney on the quantum meruit count. In order to recover under that theory, there must be an underlying agreement between the parties. The court held that woman’s hope and expectation that she would be compensated did not contractually obligate the stepfather to pay her. Therefore, summary judgment was appropriate.
The Massachusetts Supreme Judicial Court (“SJC”), has suspended an attorney for four years after finding that he charged excessive legal fees in violation of Mass. R. Prof. C. 1.5(a). The Committee for Public Counsel Services (“CPCS”)is headquartered in Boston, but hires private attorneys to provide free legal services to indigent residents of Massachusetts.
In the Matter of Derek Beauleiu, an attorney was regularly retained by the CPCS to represent children and to serve as a guardian ad litem in various Family Court proceedings. In 2008 and 2009, the attorney billed CPCS for approximately 1,800 hours of legal time for each year.
CPCS paid the attorney, but later determined that these figures were exaggerated and instituted disciplinary proceedings against him with the Board of Bar Overseers (“BBO”). After a hearing before the BBO, the board recommended that the attorney be suspended and that the matter be reviewed by the SJC.
In Massachusetts, professional negligence claims against an attorney must be filed within three years (M.G.L. c. 260 § 4). Fraud claims also have a three year statute of limitations (M.G.L. c. 260 § 2A). However, these periods do not begin to run until a client’s discovery of the actionable conduct. An Ohio appellate court has considered these issues under Ohio law and affirmed a lower court’s entry of summary judgment in favor of two attorneys in a legal malpractice case.
In DeFranco v. Judy, a woman was involved in a dispute with an Ohio county over whether a septic system on her property violated local health and zoning bylaws. In 1997, the woman hired an attorney to represent her in this matter, but he was unable to resolve the bylaw issues.
By 2004, the dispute was still ongoing, and the woman retained another attorney to represent her. The second attorney negotiated a favorable settlement, which included a future test of the septic system to determine if it was in violation. However, the woman refused to sign the agreement. The second attorney then successfully withdrew his representation. Several months later, the attorney confirmed that a test had not been performed.
In 2011, the county wrote a letter to the woman affirming that a test was never conducted. Consequently, the woman filed an action against both attorneys, alleging that they had committed malpractice and fraud by failing to ensure that the system was tested. The attorneys moved for summary judgment on the basis that the applicable statutes of limitations had expired. The trial court granted the motion and the woman appealed.
The attorney, provides the following summary of a recent legal ethics decision:
The Supreme Court of Arkansas has affirmed a contempt order issued against an attorney. In Benca v. Benton County, an attorney was representing a client at oral argument of a motion to compel discovery. During the proceedings, the presiding judge repeatedly asked the attorney to stop interrupting him, but the attorney failed to heed the judge’s orders. On the sixth disruption, the judge entered an order holding the attorney in contempt of court and fined him $100.
The attorney took a direct appeal to the Supreme Court of Arkansas, which hears all attorney discipline and contempt matters. In order to prevail on appeal, the contemnor must show that there was not substantial evidence to support a finding of contempt, with the facts viewed in the light most favorable to the hearing judge.
The attorney argued that his statements were part of the natural ebb and flow of the oral argument, and thus did not justify a contempt finding. However, upon review of the audio recording and written transcript of the hearing, it was clear the attorney ignored multiple warnings of the hearing judge. The Supreme Court thus affirmed the contempt order.
Decision: Benca v. Benton County
In all jurisdictions, including Massachusetts, a plaintiff cannot maintain a malpractice claim against an attorney unless an attorney-client relationship exists. Spinner v. Nutt, 417 Mass. 549 (1994). Lawyers hired to advise trustees of trusts owe a duty of care to beneficiaries and other third parties only in rare circumstances. Id. at 553. An Ohio appellate court has analyzed these issues and affirmed a lower court’s decision granting a law firm’s motion to dismiss a legal malpractice suit.
In Nye v. Eastman & Smith, LTD, a husband and wife hired an estate planning attorney to establish two family trusts, one in each of their names. Under the terms of the trusts, the couple’s daughter was named successor trustee and sole beneficiary of each trust upon the death of both parents. The attorney would then succeed the daughter as trustee upon her death, and several charitable organizations were named the residual beneficiaries. The trusts also purchased life insurance policies on the lives of the trustees.
Fifteen years later, both parents had passed away and the daughter became trustee and sole beneficiary of both trusts. She wished to receive a greater income from the trusts and retained a new law firm to help her accomplish this goal. The firm advised her to surrender the insurance policies for their cash value, which she did. The cash value was substantially less than the death benefit.